Tag: baseball

  • On the Rangers’ Bankruptcy

    Posted by

    Adam Levitin

    The New York Times has an interesting piece on the Texas Rangers' bankruptcy. It seems that Major League Baseball is supporting one bidder group (including Nolan Ryan), but that group hasn't made the top dollar offer. So do the Rangers have to be sold to the top bidder or do MLB's preferences (and threat to terminate the Rangers' franchise if it doesn't get its way) have to be taken into account? 

    The story doesn't explain why MLB prefers the lower bid. Maybe there's a good reason. On the other hand, "we just like them better," or "we think it'd be cool for Nolan Ryan to own the Rangers," (i.e., "in the best interests of baseball") can't be sufficient grounds for going with the lower bid. 

    What about the threat of that if their preferred bidder wins, MLB will pack up its toys and leave the sandbox? I would anticipate that a sale order would include some sort of injunction against this (e.g., no termination of franchise except for reasonable cause). To be sure, for some creditors, the loss of the Rangers' franchise would be far worse than a lower sale price, but I don't think a spite termination can be included in a valuation maximization comparison. (Fwiw, I don't think MLB's unique antitrust exemption has any bearing on whether a bankruptcy court order can enjoin it from terminating a franchise.)

    On a side note, yes, I'm aggrieved that MLB loaned the Rangers $40M, which was used to land Cliff Lee. Go go White Sox!

    [Bob: note the spacing!]

  • Tribune Bankruptcy: A Coup for Mark Cuban?

    Posted by

    Adam Levitin

    As has been widely reported, the Tribune Company has filed for Chapter 11 bankruptcy in the Delware.  Among the Tribune's major assets are its ownership of the Chicago Shlubs
    Cubs, a ne'er-do-well "ball" club, but still an extermely valuable
    Major League Baseball franchise.  (Full disclosure:  I'm a Sox fan. 
    And please don't ask what color….) 

    [Note that this is not the first baseball bankruptcy.  We've had
    minor league club bankruptcies before, such as that of the Allentown
    Ambassadors.]

    Tribune has already been trying to sell the Cubs.  In fact, bids have already been submitted. 
    Now, because the Cubs are a MLB franchise, MLB has a veto over any
    sale.  This likely means that Mark Cuban, the maverick owner of the
    Dallas Mavericks, who has coveted the Cubs for years, is unlikely to be
    able to complete a purchase, even if his is the high bid; he's not
    someone the MLB owners want in their club (in Ivyspeak, he's "not
    clubable").  And that was before the SEC brought a civil suit against
    him. 

    But bankruptcy might change this picture and let Cuban buy the Cubs.  (Good, we Southsiders say, they deserve each other!).

    Continue below the break for two ways Cuban might land the Cubs. 

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